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P21 Balancing Statement Query

  • 13-01-2014 5:14pm
    #1
    pelluci
    Registered Users, Registered Users 2 Posts: 180 ✭✭


    Hi,

    I just finished doing my balancing statement over the phone (couldn't do it online for some reason) and I'm a little baffled over my wifes PAYE tax credit (€1650). She worked part time for a few months during the year and paid no tax or USC, as she was only earning €90 per week. However, the refund, which I expected to be around €800, ended up being €240 instead and the only reason I can find is that her earnings are now being taxed @ 20% (she earned €2800 in total).

    So basically she's not being given the €560 of her PAYE tax credit that would have covered the tax due on her earnings.

    Is this correct?

    Thatnks in advance.


Comments

  • #2
    MichB2012
    Registered Users, Registered Users 2 Posts: 109 ✭✭MichB2012


    You say she didnt pay any tax? She can only get a refund if tax was paid


  • #3
    MichB2012
    Registered Users, Registered Users 2 Posts: 109 ✭✭MichB2012


    Also, can you not get her credits transferred to you, as ye are married, to reclaim a higher amount?


  • #4
    pelluci
    Registered Users, Registered Users 2 Posts: 180 ✭✭pelluci


    I should have elaborated more. I'm due the Home Carers credit (€810) and am using all her credits available to me (bar the €1650 personal or PAYE credit...can't remember which).


  • #5
    relax carry on
    Registered Users, Registered Users 2 Posts: 4,113 ✭✭✭relax carry on


    pelluci wrote: »
    I should have elaborated more. I'm due the Home Carers credit (€810) and am using all her credits available to me (bar the €1650 personal or PAYE credit...can't remember which).

    If you claim the home carers tax credit then that means any taxable income your spouse earned is taxed at 41%. Her non transferrable PAYE credit should have then being used to offset any tax due on her taxable earnings. Any unused portion of her PAYE credits non refundable.

    The balancing statement will show you how any refund due was calculated.


  • #6
    pelluci
    Registered Users, Registered Users 2 Posts: 180 ✭✭pelluci


    relax carry on wrote: »
    If you claim the home carers tax credit then that means any taxable income your spouse earned is taxed at 41%. Her non transferrable PAYE credit should have then being used to offset any tax due on her taxable earnings. Any unused portion of her PAYE credits non refundable.

    The balancing statement will show you how any refund due was calculated.

    Thanks for that. It would explain the discrepancy.


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  • #7
    pelluci
    Registered Users, Registered Users 2 Posts: 180 ✭✭pelluci


    relax carry on wrote: »
    If you claim the home carers tax credit then that means any taxable income your spouse earned is taxed at 41%. Her non transferrable PAYE credit should have then being used to offset any tax due on her taxable earnings. Any unused portion of her PAYE credits non refundable.

    The balancing statement will show you how any refund due was calculated.

    Just a quick question. Her PAYE credit was offset against her tax when she was being paid (she worked from Feb to Sept), but that was at 20% (€560), since the Home Carers credit wasn't being claimed. However, the credit have would covered her being taxed @ 41% (approx €1148), so will I be able to argue that between us we should be able to claim €1148 of the €1650 credit?

    I just want to get my head around it, as it's bound to get confusing on the phone!


  • #8
    2ndcoming
    Registered Users, Registered Users 2 Posts: 3,588 ✭✭✭2ndcoming


    This is an awkward discrepancy to explain. The PAYE credit can only be allowed @ 20% whereas your wife's income was taxable @ 41% due to claiming the home carer's credit. Your wife's employer should actually have charged tax to prevent an underpayment e.g.

    €90 p.w @ 41% = 36.90
    less PAYE credit (€90 @ 20%) = 18.00

    Tax p.w= 18.90

    If this had happened you would have got the bigger refund you were aiming for.

    The home carer's credit's worth gets less and less the more your wife earns, it's really aimed at people where one spouse is a stay at home parent with no income.


  • #9
    pelluci
    Registered Users, Registered Users 2 Posts: 180 ✭✭pelluci


    2ndcoming wrote: »
    This is an awkward discrepancy to explain. The PAYE credit can only be allowed @ 20% whereas your wife's income was taxable @ 41% due to claiming the home carer's credit. Your wife's employer should actually have charged tax to prevent an underpayment e.g.

    €90 p.w @ 41% = 36.90
    less PAYE credit (€90 @ 20%) = 18.00

    Tax p.w= 18.90

    If this had happened you would have got the bigger refund you were aiming for.

    The home carer's credit's worth gets less and less the more your wife earns, it's really aimed at people where one spouse is a stay at home parent with no income.

    Thanks, 2ndcoming. That explains it exactly. Pity the girl on the phone didn't know this. All she said was "that's the way the system calculated it".

    Thanks again.


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